Westchester Office

Trusts Are Not Just for the Wealthy

Think trust funds are only for the wealthy, for those with second homes and extravagant yachts? Think again.

There are several types of trusts available, and they can save thousands of dollars in estate and gift taxes, even if you just own a modest home. Not only that, they are a secure way to manage assets long after you have passed on.

If you have a life insurance policy, for instance, you may wish to consider an irrevocable life insurance trust. Life insurance proceeds are included in your gross estate and, therefore, are subject to federal and state estate taxes. But a life insurance policy owned by an irrevocable life insurance trust is excluded from your gross estate and can save your beneficiaries a huge chunk of money whenyou pass on.

Another type of trust is the revocable trust, which transfers ownership of one’s assets to a trust during one’s lifetime but also offers details on the distribution of property and assets upon death. The advantage over a standard will is that revocable trusts bypass the probate process. While you can be your own trustee for a revocable trust, you may prefer to name a professional trustee to manage the trust assets, keep good records, pay you a regular income and—should you become incapacitated—pay your household and medical bills.

There are many more options for trusts. To discuss your particular needs, speak to an experienced attorney.

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on Monday, December 6th, 2010 at 1:16 pm and is filed under Trusts.
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This article does not constitute legal advice and should not be relied upon. If you need legal advice concerning this or any other topic please contact our offices to schedule a consultation with one of our attorneys at 914-684-2100 or 212-490-2020.